Alabama Property and Casualty Practice Exam

To cover all employees on one Fidelity Bond, you would use a?

1. Individual bond

2. Name schedule bond

3. Blanket bond

4. Position schedule bond

The correct answer is: Blanket bond

A blanket bond is specifically designed to cover all employees within an organization under a single bond. This type of bond provides comprehensive coverage against losses caused by dishonest acts, such as theft or fraud, committed by employees. Unlike individual bonds, which only cover specific personnel, or named schedule bonds that cover only listed individuals, a blanket bond offers broader protection across the entirety of the employee base, making it a convenient and efficient option for businesses that want to protect themselves against employee dishonesty without the burden of tracking individual bonds for every employee. This collective coverage means that as new employees are hired or existing employees leave, they automatically fall under this blanket bond. Therefore, it simplifies the bonding process and ensures continuous coverage without the need for constant updates or adjustments to the bond.